By Adwitiya Srivastava
(Reuters) – Shares of Bank of Queensland (BOQ) surged to a more than two-year high on Thursday, as analysts at Citi and Morgan Stanley bet on the stock after the lender’s strong half-year results.
The Australian bank’s shares rose as much as 4.5% to A$7.170, hitting their highest level since February 15, 2023, and were last up about 3.4%. The stock is on track to log its third consecutive session of gains, if the trend holds.
The bank reported a 13% rise in its half-year statutory net profit after tax (NPAT) on Wednesday, buoyed by improved margins, lower costs and subdued credit losses.
Cash earnings were up 6% during the reported period, reaching A$183 million ($116.39 million), about 10-11% ahead of Citi’s estimates.
Analysts at Citi said the growth in earnings was attributable to BOQ’s strong management of the balance sheet to run down mortgages, liquid assets and wholesale funding.
They added that the bank pivoting towards high-margin lending business protected it from asset and liability side pressures.
Citi expects these benefits to persist into the second half of the year.
However, despite being largely upbeat on the stock, Citi flagged potential headwinds from interest rates and competition going ahead.
Analysts at Morgan Stanley, too, were upbeat on BOQ’s ahead-of-consensus half-year results, and said a low loan loss boosted earnings.
The bank reported a net interest margin of 1.57%, which was flat year on year.
Morgan Stanley said the margin was broadly in line with expectations, and was supported by lending and deposit mix benefits.
($1 = 1.5723 Australian dollars)
(Reporting by Adwitiya Srivastava in Bengaluru; Editing by Rashmi Aich)
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